Peru to auction natgas pipeline project in 1st-half 2018

LIMA, July 6 (Reuters) - Peru is planning to hold a new auction for a natural gas pipeline in the first half of 2018 after rescinding a $5 billion contract for the project with Brazil’s scandal-racked Odebrecht, the head of state bidding agency Proinversion said on Thursday.

The government rescinded the contract for the proposed 1,134-kilometer (705-mile) pipeline in January after the consortium led by Odebrecht missed a financing deadline amid a growing graft scandal.

Proinversion director Alvaro Quijandria said the project’s design might change following a feasibility study under way now based on the original plan.

The next operator will have the option of buying the assets that the Odebrecht consortium had invested in the project, the value of which will be determined by an audit that has not yet started, said Quijandria.

The Odebrecht consortium said the pipeline was about a third finished when work on it stopped in mid 2016. Peruvian builder Grana y Montero , Odebrecht’s junior partner on the project, has said that the consortium invested about $2 billion in the project.

Odebrecht once played a large role in building Peru’s public work projects but the company has been barred from bidding on new contracts since acknowledging late last year that it distributed millions of dollars in bribes across Latin America.

“We think we can diversify the origin of investments a bit,” Quijandria said on the sidelines of an auction for a project to dredge and maintain a navigable waterway in the Amazon.

The $95 million waterway project was awarded to a consortium formed by a subsidiary of China’s state-run Power Construction Corporation of China and Peruvian builder Construccion y Administracion SA. (Reporting by Mitra Taj; Editing by Sandra Maler)